TaxTMI 
TaxTMI 
2022 (10) TMI 1288
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....n the facts and circumstances of the case and in law, the Learned AO / Transfer Pricing Officer ('TPO') / Dispute Resolution Panel ('DRP') has erred in making following arbitrary, adhoc and inconsistent Transfer Pricing ('TP') adjustment of INR 28,70,16,704 in respect of payment for intra-group services availed by the Appellant from Associated Enterprises ('AEs') viz. INEOS Styrolution Group GmbH ('INEOS Germany') and INEOS Styrolution APAC Pte. Ltd. ('INEOS Singapore'); and Rendition of Contract Research & Development ('R&D') Services to its AE viz. INEOS Germany: a. Global Head Office ('GHO') Charge availed from INEOS Germany : INR 6,97,69,928 b. Regional Head Office ('RHO') Charge availed from INEOS Singapore: INR 21,64,01,560 c. Rendition of Contract R&D Services to INEOS Germany: INR 8,45,215 Principle of Natural Justice: 2. On the facts and circumstances of the case and in law, the Learned AO / DRP has erred in ignoring the fact that the Learned TPO has issued show cause notice at the fag end of assessment proceedings and has not provided reasonable time to the Appellant to respond to the show cause notice. Thus, based on the princ....
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....mstances of the case and in law, the learned AO/TPO/ DRP has erred in making an - adjustment for the part services provided by Group CEO, CFO, Global Financial Controller and Risk Management by concluding that the intra-group services i.e. GHO Services and RHO Services availed by the Appellant are in the nature of shareholder services for which no independent entity would agree to make any payment, thereby ignoring the fact that part of the services pertaining to shareholder activities are already excluded by the AEs while charging the Appellant for GHO Services and RHO Services. 11. On the facts and circumstances of the case arid in law, the learned AO / TPO / DRP has erred in adopting an arbitrary approach in determining the arm's length price of the intra group services (except one sub-head under GHO service charges) at NIL for all heads of intra-group services, without providing any cogent reasons and without appreciating the detailed evidence filed by the Appellant to substantiate the provision of such services by the Group, the cost incurred by the Group in rendering such services and the basis on which these costs have been allocated to the Appellant 12. On....
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.... Contract R&D Services by the Appellant to its AE viz. INEOS Germany. 19. On the facts and circumstances of the case and in law, the learned AO / TPO / DRP have erred in disregarding the detailed functions, assets and risk analysis ('FAR'), benchmarking approach and the methodology adopted by the Appellant, in its TP documentation maintained under section 92D of the Act read with Rule 10D of the Rules. 20. On the facts and circumstances of the case and in law, the learned AO / TPO / DRP have erred in accepting the rate of 29 percent as arm's length and in not considering margin of 20.73 percent, which is within the arm's length margin of 8.96 percent to 13.19 percent earned by the independent comparable companies engaged in similar business as that of the Appellant. 21. On the facts and circumstances of the case and in law, the learned AO /TPO / DRP erred in ignoring the rule of consistency, as this transaction was already scrutinised and accepted by the Learned AO / TPO in the earlier years (i.e. AY 2017-18) under the same arrangement (viz. agreement dated 18 November 2013). Incorrect Computation of Demand 22. On the facts and circu....
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....immediately preceding year, ITAT, Ahmedabad in the assessee's own case (Ineos Styrolution India Ltd v. DCIT, TP-I, Ahmedabad in ITA No. 58 /Ahd/2022) had provided relief in respect of global head office services and regional head office services with the following observations: "9. We have heard the rival contentions and perused the material on record. We shall divide our conclusion in two parts- firstly, whether factually it can be concluded that the assessee has availed India related services from its global/ regional headquarters. In our considered view, the Ld. TPO has taken a rather restrictive view while coming to the conclusion that no India related services have been rendered in the instant set of facts. The Ld. Counsel for the assessee took us through various emails exchanged between the assessee and its overseas offices. The services received in the form of e-mails have been classified under various heads viz. Treasury functions, Controlling functions, Information Technology, Finance support, Information Technology support, CFO functions etc. On perusal of the Summarized Chart furnished to us (along-with copies of emails), we observe that India specific support h....
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....or would have been charged or paid for the same or similar uncontrolled transaction between non-associated enterprises. However, in the present case, the Ld. TPO without searching for similar uncontrolled transaction between nonassociated enterprises, straightaway treated the value of the international transaction to be at "NIL". In the present case, no search was conducted to find out the independent entity in a comparable transaction and the arm's length price of the international transaction was treated to be NIL. In the present case, no doubts about payments made by the assessee have been raised by the Assessing Officer under section 37 of the Act. Further, accrual of benefit to assessee or the commercial expediency of any expenditure incurred by the assessee cannot be the basis for disallowing the same, as held by Hon'ble Delhi High Court in the case of EKL Appliances Ltd. [2012] 345 ITR 241 (Del.). In our considered view, the assessee has been able to demonstrate, with substantial supporting material that it availed India specific services from its Head Office / Regional Office. The Ld. Transfer Pricing Officer in view has taken a rather restrictive view in coming to the conc....
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....aid comparables was 8.96 percent and 13.19 percent, with a median of 10.97 percent. The detailed search strategy is provided to learned TPO vide submission dated 12 July 2021 (refer Page No 86 to 91 of the paper book). 10.4. From the above, your Hon'ble Panel will appreciate that the margin earned by the Assessee is higher than the 65th percentile. Further, the Learned TPO has also not raised any objections on the comparable companies identified by the Assessee. Hence, the margin of 20.73 percent on cost should be accepted to be at arm's length. 10.5. The Assessee would like to place reliance on following judicial precedents wherein it is held that TPO has to confine himself to one of the prescribed methods for determination of the ALP of international transaction, for which mechanism has been prescribed in Rule 10B of the Rules. ..... 10.6. Therefore, in light of the above decisions, the appellant submits before the Hon'ble Panel that the Ld. AO/TPO could not have determined the arm's length price of rendition of Contract R&D services without bringing on record any comparable uncontrolled transaction. Hence, the margin of 20.73 percent o....